Venture capitalists provide financing for new firms from the seed and start-up stage all the way to mezzanine and bridge financing. In exchange for financing,entrepreneurs give:

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Venture capitalists typically provide financing in exchange for an equity position in the company, which means they become part owners of the business. They may also request board of director positions to ensure their investment is protected. This allows them to potentially earn higher returns if the company succeeds. They do not typically require a high interest rate debt instrument or control over the company. Giving up the right to have an initial public offering is not a standard practice either, and relinquishing control to a court-appointed trustee or giving venture capitalists jobs as CEOs or CFOs would be highly unusual.

Venture Capitalists Provide Financing for New Firms from the Seed